Question

Heartland Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Heartland purchased goodwill as part of the acquisition of Shurburn Wireless Company, which had the following figures:
Book value of assets ............ $ 800,000
Market value of assets ............ 900,000
Market value of liabilities ......... 540,000

Requirements
1. Journalize the entry to record Heartland’s purchase of Shurburn Wireless for $ 360,000 cash plus a $ 540,000 note payable.
2. What special asset does Heartland’s acquisition of Shurburn Wireless identify? How should Heartland Telecom account for this asset after acquiring Shurburn Wireless? Explain in detail.



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  • CreatedJanuary 16, 2015
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